Oct. 24 (Bloomberg) -- Vietnam’s office rents will fall as much as 7 percent in 2012 because buildings are completed at a faster rate than business expansion, said Jones Lang LaSalle Inc., the world’s second-biggest commercial property broker.
The new properties will boost the nation’s grade A office space by about a third in 2012, pushing rents down by 5 percent to 7 percent, according to Jones Lang LaSalle Vietnam Co. Keangnam Hanoi Landmark Tower will add about 95,000 square meters (1 million square feet) when it opens later this year in the capital city as the nation’s tallest building.
“There is quite a number of Grade A commercial space coming out of the ground at the moment, so supply is outstripping demand,” David Lyons, Ho Chi Minh City-based managing director at the Vietnam unit, said in an Oct. 21 phone interview. Rents will rebound and have “a steady recovery” in 2013 as inflation and interest rates go down, he said.
The government is aiming to reduce the inflation rate to less than 10 percent in 2012, from an estimated 18 percent for this year, Prime Minister Nguyen Tan Dung said on Oct. 20. Lyons expects more international companies in banking, energy and retail sectors to set up their offices in Vietnam, supporting the recovery in what he called a “huge market.”
--Diep Ngoc Pham in Hanoi. Editors: Linus Chua, Tomoko Yamazaki
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